Few buildings stand out in downtown Cleveland like 200 Public Square. This 45-story office tower once served as the headquarters for petroleum giant BP, before that company purchased Amoco and moved to Chicago. Today, it serves as regional headquarters for Huntington Bancshares and is the third-tallest building in downtown Cleveland.
But the building is more than that: Bill Stevens, senior associate with Colliers International, says that 200 Public Square serves as a symbol of the resurgence of downtown Cleveland.
“This building is a great example of how Cleveland has been able to get through the rough times,” said Stevens, one of the Colliers brokers leading leasing efforts at the landmark building. “People weren’t happy when BP left. But now 200 Public Square is 85 percent occupied. It has become a busy, multi-tenanted building.”
The latest good news surrounding 200 Public Square? FOX Sports Ohio, and its SportsTime Ohio regional sports TV network, are the latest tenants to join the roster here. Both the company’s television studio and offices will move to the office tower.
Colliers International|Cleveland associates Brian Hurtuk and Stevens represented the landlord, Cleveland Financial Associates, in the pair of transactions.
FOX Sports Ohio and SportsTime Ohio were represented by Damon Taseff and Adam Gimbel of Allegro Realty Advisors. The two businesses will occupy space in 200 Public Square’s lobby and tower.
Stevens said that the site was a natural for the pair of businesses. The two new tenants will take up the entire northern half of the building’s atrium space. FOX Sports Ohio’s office space will be located upstairs from the studio.
“This location provides a great mix of visibility and functionality,” Stevens said. “It’s the exact mix that they needed to run a 24/7 studio and have office space for the employees.”
Good news all around
200 Public Square isn’t the only building that is active in downtown Cleveland today. The center of this city is in the middle of a growth spurt, one that is seeing new residents flocking to the city’s urban core.
Cleveland isn’t alone in this trend, of course. Plenty has been written about the growing number of people of all ages — but especially young people — who want to live in urban neighborhoods in which they can walk to public transportation, shops, restaurants and bars.
In downtown Cleveland, this has meant the conversion of several outdated Class-C office buildings into multifamily spaces.
“That has been fantastic for downtown Cleveland,” Stevens said. “It takes space off the market that would have sat vacant for years. It brings a vibrancy to downtown.”
Colliers and Stevens are far from the only CRE pros doing business in Cleveland who are excited about the future of the city and its core.
Just consider the year-end 2014 office report from Cleveland’s NAI Daus. The headline on the report tells the tale: “The future is bright!” it declares.
It’s hard to argue. NAI Daus had plenty of positives to share about the state of the Northeast Ohio office market in its year-end report.
As the company reports, the Central Business District in Cleveland remains in the middle of a renaissance period, generating plenty of positive press across the nation. The Republican National Committee has added to the good feeling here, choosing Cleveland as the home for its 2016 national convention.
In the Class-A office category in Cleveland’s CBD — a sector that NAI Daus says includes 11 buildings — the vacancy rate stood at 15 percent at the end of 2014. That’s down a bit from 15.23 percent at the end of 2013, and makes this sector the strongest of all the office submarkets in the Cleveland area.
A big boon to the area has been the Ernst & Young Tower in the Flats East Bank neighborhood. As NAI Daus reports, a flow of tenants has moved to this new office tower. This has provided opportunities for tenants currently in Class-B office buildings to upgrade to more efficient and higher-quality space.
An important trend in the CBD office market is the continuing conversion of obsolete Class-B and -C office buildings to apartment buildings. NAI Daus officials predict that during the next 24 to 36 months the Cleveland market should see a steady reduction in vacancies in the Class-B and Class-C office categories.
University Hospital’s purchase of 90,000 square feet of vacant space at One Harvard Crossing in the city’s East submarket was also an important transaction. This property will disappear from the city’s competitive inventory after it makes the transition to owner-occupied status in the first quarter of this year.
NAI Daus also pointed to Graftech’s plans to move its office headquarters and research center into two South submarket locations. This move will equal around 50,000 square feet of positive absorption.
“Things are great right now in downtown Cleveland,” Stevens said. “We have great new tenants in 200 Public Square. That building has done a terrific job, too, of retaining tenants that are already in it. This is an exciting time for 200 Public Square and for downtown Cleveland.”